G20 leaders pledge $1 trillion to kick start global economy

By Arvind Padmanabhan and Dipanker De Sarkar London, April 2 (IANS) World leaders Thursday agreed to pledge $1 trillion more to the International Monetary Fund and other institutions to tide over the worst financial crises in six decades, bringing with it the promise of a greater role for emerging economies like India in the running of the global financial system.

The leaders also agreed to negotiate a speedy conclusion of the Doha trade round and put some $250 billion more for trade finance, both of which were key demands from India, represented by Prime Minister Manmohan Singh.

“We have reached some big, important conclusions,” British Prime Minister and the chair of the G20 summit Gordon Brown said after the leaders concluded their in-camera talks at the ExCel Centre in east London on the bank of Thames, away from the glare of protesters.

Out of $1 trillion pledged for various institutions, $250 billion will be given to the IMF to lend at cheaper rates to needy countries in the form of special drawing rights (SDRs).

The British prime minister said with the decisions reached Thursday, some $5 trillion will be spent by the member countries of G20, that account for nearly 85 percent of the global output and two-thirds of the population.

The G20 leaders also agreed to bring an end to tax havens’ jurisdictions that allow people to park their funds hiding behind strict banking secrecy laws, as also those that have extremely loose regulation for the financial sector.

“Banking secrecy must come to an end,” Brown said at the press conference, adding the G20 leaders have committed themselves to ensuring such countries and jurisdictions are not allowed to carry on with the old models.